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Water Privatisation in Cochabamba, Bolivia

Type of conflict sub
Intensity 2
Region
South America
Time 2000 ‐ ongoing
Countries Bolivia
Resources Water
Conflict Summary In 2000, privatisation of the drinking water in Cochabamba incurred violent protests and escalated into the so-called Water War of Cochabamba, which killed...
Water Privatisation in Cochabamba, Bolivia
In 2000, privatisation of the drinking water in Cochabamba incurred violent protests and escalated into the so-called Water War of Cochabamba, which killed at least nine people. Eventually, the city’s water was renationalised and access to water received new legal backing. However, dwindling water supplies induced by global climate change, over-consumption and technological deficiencies continue to heavily strain the city of Cochabamba and Bolivia on the whole.
Conceptual Model

Climate Change

The city of Cochabamba has been suffering from long term water scarcity, generally affecting poor income residents to a higher degree. The situation is expected to be further exacerbated by climate change patterns in the future.

Intermediary Mechanisms

The Bolivian government sought financial support from the World Bank and the International Monetary Fund (IMF) as the country underwent economic hardships. As a condition for receiving loan assistance, the Bolivian government was required to privatize many national industries, including the water system of the city of Cochabamba. The water rights of the city were eventually sold to the company Aguas del Tunari.

Fragility and Conflict Risks

The Bolivian government sought financial support from the World Bank and the International Monetary Fund (IMF) as the country underwent economic hardships. As a condition for receiving loan assistance, the Bolivian government was required to privatize many national industries, including the water system of the city of Cochabamba. The water rights of the city were eventually sold to the company Aguas del Tunari.

Climate ChangeEnvironmental ChangeIntermediary MechanismsFragility and Conflict RisksSocial and Economic DriversChanging climate leads to decreased water availability.Economic developments place additional strains on water resources.Freshwater becomes scarce as an essential resource. Reduced availability of/access to natural resources provokes discontent with the state.A slow change in climatic conditions, particularly temperature and precipitation.Gradual Change in Temperature and/or PrecipitationAn increase in the scarcity of clean water and/or an increased variability in water supply.Increased Water ScarcityA broad concept to cover economic growth in general but also specific economic changes or changes of incentives.Economic DevelopmentReduced availability of essential natural resources, such as land and water.Change in Access / Availability of Natural ResourcesChallenge to the state's legitimacy, ranging from peaceful protest to violent attempts at overthrowing the government.Anti-State Grievances
Context Factors
Conflict History

In 2000, protests first erupted over the privatisation of Cochabamba's water system and the subsequent rise in water prices. The protests eventually turned violent, resulting in several fatalities, injuries and a declaration of a 'state of siege'. In the end, the conflict culminated in the revoking of the contract to the company (Beckermann, 2013).

Privatisations
Economic hardship prompted the Bolivian government to seek financial support from the World Bank and the International Monetary Fund (IMF). As a condition for receiving loan assistance, the World Bank and IMF required the Bolivian government to foster the privatisation of state industries, as well as to increase private investment and to refrain from heavily subsidising public services. Hence, within this context, many national industries were privatised. At the same time, the water rights of the city of Cochabamba were sold to the private company Aguas del Tunari (owned by International Water) in the hope that water and sanitary services for Cochabamba would improve. Besides this 2,5 mio USD concession, the company was also granted the rights to generate electricity and irrigation water for agricultural purposes. Aguas del Tunari planned to expand the city's water systems and built a costly dam (PBS, 2002).

Law 2029
In order to guarantee the legal grounds for the privatisation, the Bolivian government passed the 2029 law. This law comprised the selling of water resources that were not previously part of the state entity in charge for the water provision called SEMAPA. This led to concerns from local stakeholders that the previously independent communal water systems could also be expropriated. Moreover, Aguas del Tunari acquired the rights to charge residents for using connecting installations to these systems and the population was required to dispose of a concession to use rain water according to this law.

Cochabamba's water issues
The city has been suffering from longstanding chronic water shortages. Notably, it has been criticised that the water is diverted to middle income and industrial sectors, while the poorer parts of the city and its inhabitants, had to resort to develop their own wells and water systems to deal with the water shortage (Gigler, 2009).

Protests and cancelation of the contract
Protests started peacefully in January 2000, when prices doubled for many residents. In particular, the protesters asserted their right to have access to water, which they felt had been disregarded during the process of privatisation. A major issue related to this conflict was the fact that the poorest parts of the city were not receiving piped water whilst the richer parts were.

The protests turned violent in February 2000, when military police from La Paz, Bolivia entered the city of Cochabamba to suppress a series of mass protests carried out by Cochabamba's rural and urban inhabitants (Beckermann, 2013). As a consequence, a 'state of siege' was declared by the Bolivian President. The violence resulting from the protests and blockages resulted in at least 7 death and hundreds of civilian and police casualties. Additionally, roughly 200 protesters were arrested, including protest leaders. A peak in the protests was reached when the video of a military leader shooting a student to death went viral. After this incident, the government officially stated that it was unable to guarantee the safety of the executives of the water company and ended the contract with Aguas del Tunari. During its violent climax, also known as the Bolivian Water War, the conflict attracted much international attention and coverage with activists protesting during the IMF and World Bank meetings in Washington (Taringa, 2011).

Post-Privatisation situation in Cochabamba 
The Bolivian public water company SEMAPA was reinstated over the municipal water source and a national bill was created which prioritised social needs over economic needs. Moreover, it ensured informal local water sources - that many of the disadvantaged parts of the population rely on - were protected by law. Subsequently, the water price in Cochabamba fell to pre-2000 rates after the revoke of the privatisation. However, in 2005 approximately 600,000 people remained once again without water or received merely intermittent water services of several hours a day (Taringa, 2011).

Today, Cochabamba remains challenged to develop alternative models to water privatisation. Though the municipal water entity SEMAPA has more than tripled its service area since 2000, more than 40% of the city’s residents are still without piped water and sanitation services. Those living outside the water provision grid are still forced to pay significantly higher prices for trucked-in water of low quality. Moreover, outstanding charges against SEMAPA for mismanagement, corruption, and inefficiency continue to haunt the organisation. SEMAPA laid off 150 workers in 2010 in order to overcome a cash deficit due to alleged financial irregularities (Achtenberg, 2013).

General outlook
Climate change acts as a dramatically exacerbating factor in the conflict over water in the region. Given recent trends in glacial melting patterns in Bolivia, it is likely to exacerbate the long term water scarcity with dramatic effects (Buxton et al., 2013). Against the backdrop of socio-economic level of stark inequality, high dependence on water for subsistence farming and the increasing scarcity of freshwater supply in the urban agglomerations, more conflicts are likely to erupt in the future (Gigler, 2009).

Resolution Efforts

Grassroot organisation's takeover
The grassroots organisation La Coordinadora primarily headed the protest and negotiated the release of detained protesters and the repeal of the water privatisation law. La Coordinara was initiated by the Cochabamba Department Federation of Irrigators (Federación Departamental Cochabambina de Regantes - FEDECOR) and is composed of local experts, as well as members of a labour association. The demands in its core addressed unemployment and economic problems and were primarily directed at the government.

In April 2000, Oscar Olivera – leader of La Coordinadora - signed an agreement with the Bolivian government to revoke the contract of Aguas del Tunari. The agreement also guaranteed the release of detained protesters and the repeal of water privatisation legislation. The law 2029 - that was notably seen critical for charging peasants for withdrawing water from local wells - was also removed. Moreover, the water management was handed to the organisation of La Coordinadora and protesters released from prisons (Beckermann, 2013).

Lawsuit against lost investments
After the concession was withdrawn, and the 200 mio USD contract revoked, the company filed a complaint of 40 mio USD in the International Centre for Settlement of Investment Disputes (ICSID) - a member of the World Bank Group - against the Bolivian government for lost benefits on the basis of the bilateral investment contract.

In 2002, a protest was staged by La Coordinadora in front of the headquarters of Bechtel - a shareholder of the company Aguas del Tunari in the USA - in San Francisco (California). The activists demanded that the 25 mio USD compensation for lost investments requested by the company should be invested in improved water access in Bolivia. In January 2006, an agreement between the government under Eduardo Rodríguez Veltzé and Aguas del Tunari was reached agreeing that the concession was withdrawn because of civil unrest and a state of emergency in Cochabamba. With this declaration both parties renounced on any financial demands against each other and the legal battle was settled (Taringa, 2011).

Public water provision still insufficient
As of today, insufficient mechanisms for private and public water management prevail. Residents of Cochabamba’s southern zones rely more and more on traditional, community-managed water systems. These water distribution systems are managed autonomously by elected water committees, cooperatives, or community groups seeking some amount of collaboration with SEMAPA. The local water committees have in some cases received technical assistance and direct EU financing for their systems.

Some studies have been very critical of the role of the international development cooperation throughout the longstanding water quarrels. They are said not only to have sought conflict resolution by staging dialogue and mediation events, but also to have influenced negotiations as well as economic decisions of Bolivia, and undermined national sovereignty with ulterior motives (Fritz, 2006).

Intensities & Influences
conflict intensity scale
Intensities
International / Geopolitical Intensity
Human Suffering

Influences
Environmental Influences
Societal Influences

Diplomatic Crisis No diplomatic crisis
Fatalities
6
Violent Conflict Yes
Salience within nation National
Mass Displacement None
Cross Border Mass Displacement No
Resources
Water
Resolution Success
Reduction in Violence Violence has ceded completely.
Reduction in geographical scope The geographical scope of the conflict has decreased.
Increased capacity to address grievance in the future There is no increased capacity to address grievances in the future.
Grievance Resolution Grievances have been mostly addressed.
Causal Attribution of Decrease in Conflict Intensity Decrease in conflict intensity at least partially the result of conflict resolution strategies.
General opencollapse
Country Data in Comparison
ConflictNoData Created with Sketch.
Fault Lines Defining Conflict Parties
Purely Environmental | Cultural   ♦   Occupational   ♦   Economic   ♦   Urban / Rural   ♦   National / International conflict   ♦   Sub-national political


Actors
Participation Conflict Party     Conflict Resolution Facilitator
SEMAPA - Bolivian Public Water Company
Functional GroupPublic
Geographical ScaleInternal National
Bolivian Government
Functional GroupPublic
Geographical ScaleInternal National
Aguas del Tunari
Functional GroupCommercial
Geographical ScaleExternal
Cochabamba Department Federation of Irrigators
Functional GroupCivil Society
Geographical ScaleInternal Grassroots
Cochabamba Residents
Functional GroupCivil Society
Geographical ScaleInternal Grassroots
International Development Cooperation Organisations
Functional GroupPublic
Geographical ScaleExternal
European Union
Functional GroupPublic
Geographical ScaleExternal
La Coordinadora
Functional GroupCivil Society
Geographical ScaleInternal Grassroots
Entry Points for Resilience and Peace Building
2 Treaty/agreement In April 2000, the leader of La Coordinadora successfully signed an agreement with the Bolivian government to revoke the contract with the company Aguas del Tunari.
1 Improving infrastructure & services Improved mechanisms for private and public water management are still needed as many residents rely increasingly more on traditional, community-managed systems. Some local water communities have received technical assistance and direct EU financing for their systems.
2 Promoting social change The widely held protests were primarily headed by the grassroots organization La Coordinadora, and were carried out by Cochabamba’s rural and urban inhabitants. La Coordinadora also negotiated the release of detained protesters and the repeal of the water privatization law.
Further Details opencollapse
Conflict Characterization
Character of the contested good Common-pool resource: No one can be excluded from use but the good is depleted.
Structure of decision-making power / interdependence Asymmetric: The power to affect the environmental resource is unequal.
Broad conflict characterization Resource capture is not present.
Ecological marginalization is not present.
Data of involved Countries
Resources and Materials opencollapse
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Topics

Adaptation & Resilience

All countries will need to adapt to some of the environmental, social and economic impacts of climate change that are already unavoidable. Food security, livelihoods, water resource availability and public health are some affected areas. People living in poverty are more vulnerable, having a lower capacity to adapt. Thus, it is essential to promote resilience building. The adaptation and resilience aspects need to be mainstreamed into planning by policy makers and the private sector as well as integrated into development strategies.

Biodiversity & Livelihoods

Nature protection is most sustainable if it essentially contributes to the long-term stability of human needs. Today many regions around the world are confronted with increasing destruction of the natural foundations of life. The consequences of wide-ranging resource destruction are no longer regionally limited, but rather represent a global threat. Those affected are mainly rural populations, who find the sources of their income and the foundations of their way of life swept away. The depletion and destruction of natural resources goes hand in hand with decreasing agricultural yields and increasing poverty, which in turn forces the affected populations to deplete the remaining resources.

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Capacity Building

On the one hand, conflicts are caused by structural factors, such as economic and social inequality or environmental destruction. On the other hand, conflicts are fuelled by a lack of democratic structures, deficient mechanisms of non-violent conflict settlement, inadequate rule of law, the destruction of social and cultural identity and the disregard of human rights. Against this backdrop, development policies have been dedicated to a broad concept of security, which comprises political, economic, ecological and social stability. As a consequence, development cooperation agencies and actors have developed a broad spectrum of approaches for conflict prevention and transformation as well as for sustainable use of natural resources.

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Cities

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Civil Society

Civil society is the first victim of environmental pollution, under-development and conflicts. Economically disadvantaged and politically marginalized population groups are particularly affected by violent conflicts as well as increasing resource degradation. Simultaneously, civil society is a fundamental pillar for implementing sustainable development. It contributes in many ways to strengthening conflict prevention and plays a significant role in the peaceful and democratic development of states. It must be supported to strengthen civil rights, adherence to human rights in general and democratic participation.

Climate Change

Climate change resulting from the emission of greenhouse gases represents one of the vital challenges for international environmental policy. Flooding, droughts, shifting of climate zones and increasingly frequent and intense extreme weather events will have serious economic and social consequences for entire regions. The climate problem is also directly linked to the question of future energy generation.

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Climate Diplomacy

To address the challenges posed by climate change, a new profile of climate diplomacy is evolving. This utilises a full range of policies, including development cooperation, conflict prevention efforts, and humanitarian assistance, in addition to more traditional measures of climate change adaptation and mitigation. Moving from a risk analysis of climate-related threats to well-timed preventive action requires a greater commitment to integrating climate change concerns into development, foreign, and security policies. Examples include strengthening diplomatic networks, building new alliances with partners, and raising awareness – not only of potentially negative climate change impacts, but also of opportunities to embark on a sustainable transformation of our societies.

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Co-Benefits

Climate action entails an array of economic, social, political and environmental co-benefits. It provides an opportunity for economic growth and new jobs. Many investments can take into account climate considerations without becoming more costly. Further important co-benefits include: improved energy security, less local air and water pollution, health benefits as well as ecosystem and biodiversity protection.

Conflict Transformation

In order to overcome the structural causes of violent conflicts and thus bring about an improvement in the framework conditions for peaceful and fair development, it is essential to have long term and broadly planned peace development and peace advancement. Various governmental and non-governmental, national and international actors and groups are involved in these processes.

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Development

Climate change and development are inextricably linked. Climate change endangers the development agenda and has the potential to reverse development goals. Furthermore, successful mitigation of climate change heavily depends on development choices around the world. Therefore, development strategies need to be climate-compatible to provide long-term success, and there are viable policy options that support this compatibility. Many mitigation and adaptation activities can present development opportunities to developing countries and avoid the lock-in to environmentally damaging technologies.

Early Warning & Risk Analysis

The reasons for the development and escalation of conflicts and the incidence of risks are multifaceted and complex. Simultaneously, the assessment of the specific causes in the form of risk and conflict analyses can contribute to a better understanding of these processes and make it possible to provide warning of negative developments, or ideally help prevent them. In the context of natural resource use, risks and conflicts have gained increasing attention in the past years. The debate on possible future water wars is merely one example.

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Energy

The well-being of individuals, communities and nations depends on the availability of energy resources. The gap between energy supply and demand appears to be growing, making the world vulnerable to serious economic shocks. At the same time, the burning of fossil fuels causing climate change is one of the vital challenges of international environmental policy. So far, only rudimentary approaches exist for shaping climate and energy security in a sustainable way. The components of a strategy that can contribute to reducing vulnerabilities related to climate change and energy policy include a greater role for renewable energies, the improvement of energy efficiency and a stronger decentralisation of energy supply.

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Environment & Migration

The economic, social and environmental consequences of climate change aggravate the breakdown of eco-system-dependent livelihoods and are likely to become dominant drivers of long-term migration. Natural disasters already cause massive shorter-term displacement and the number of temporarily displaced people is likely to further increase with climate change. For vulnerable populations in vulnerable regions, such as the Sahel zone or the Ganges delta, migration often becomes the sole survival strategy. In order to address climate-related displacement and migration successfully, knowledge of effective adaptation and an improved understanding of how environmental change affects human mobility is essential. 

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Finance

Climate finance, from all sources, plays a key role in supporting and enabling adaptation and mitigation action as well as climate and energy innovation. The Paris Agreement ensured that the Green Climate Fund and the Global Environment Facility are at the core of climate finance architecture as entities entrusted with the operation of the Financial Mechanism of the UNFCCC. Increasing climate finance from all relevant public and private sources is crucial. Furthermore, much needs to be done to redirect finance flows to sustainable paths, e.g. reducing fossil fuel subsidies, introducing maritime and air transportation taxes. The conditions for green investment in developing countries should also be improved.

Forests

Forests are disappearing at an alarming rate. Competition for forest resources triggers, exacerbates, or finances numerous crises and conflicts in tropical developing countries. Illegal logging and timber trade foster instability and sometimes violent conflict by strengthening illegal and armed groups, increasing corruption and exacerbating use and claim conflicts among local communities, the state and the business sector. Forests are a vital resource to poor people but they can also become areas of conflict. Sustainable management of forest resources is therefore key to preventing violent conflict over and within forests.

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Gender

Gender plays an important role as a category of conflict for many reasons. The interlinkages between gender, environment and conflicts are complex and much research is still needed. Existing insights suggest that conflicts may worsen gender inequalities that existed before the outbreak of violence. The unequal distribution of land property rights in many parts of the world serves as an example. Moreover, women (and children) are among those most affected by both violent conflict and natural disasters. At the same time, women carry much of the burden of trying to implement rehabilitation measures after crisis events.

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Land & Food

Increasing water scarcity, desertification and crop failures due to extreme weather events are becoming more and more of a threat to global food production. While the world’s population continues to grow rapidly, food production is unable to keep pace. Due to the global food crisis in 2008, the number of hungry people reached the symbolic one billion threshold for the first time – corresponding to about 16 percent of world population. Food insecurity may be a consequence or cause of conflicts. Violent conflicts often lead to the destruction of agricultural infrastructure and means of production, as well as to the displacement of local communities.

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Minerals & Mining

In the past, the discovery and tapping of valuable or strategic resources like valuable minerals, oil and natural gas, particularly in developing and emerging countries, has often led to large scale environmental contamination and negative development. The "resource curse" of some countries shows that the wealth from resource yields is frequently unfairly distributed; instead of serving development it advanced the formation of corrupt elites and in some cases even led to conflicts and civil wars. Measures in various sectors and at all levels are important in order to use the potential of these natural resources in a manner that is sustainable and prevents conflicts.

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Private Sector

The spread of violent conflict not only affects people but also companies located in such regions. Destruction of investments and infrastructure, collapse of markets and trade partnerships, flight and expulsion of employees are phenomena of conflicts and environment-induced crises that directly affect companies in unstable regions. Almost all branches of the economy thus have a clear interest in a stable and peaceful environment for their activities. Conversely, the business sector plays an important role in the interaction of economic growth, social development and a healthy environment, all of which can advance peace and sustainable development. 

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Security

Environmental issues have a significant security dimension. Access to, and overuse of, natural resources often play a key role in civil wars or other forms of internal domestic conflict. This is compounded by climate change and environmental degradation. Climate change is now widely recognised as a non-traditional, risk-multiplying threat that will have increasing security impacts. Key risks with possible implications for human and national security include water scarcity, food crises, natural disasters, and displacement. More preventive diplomacy and advocacy is needed to address the strategic implications of climate and environmental change.

Sustainable Transformation

Sustainable Transformation allows societies to profit from a growing, environmentally sustainable and socially inclusive economy – especially in emerging and developing countries. This requires a higher up-front investment, but the benefits of a sustainable transformation in the medium and long term are significant. For instance, energy cost savings and reducing the impact of price volatility offer major incentives for deploying renewable energies and promoting energy efficiency. Such benefits exist in all key sectors of the economy.

Technology & Innovation

Innovations and technologies are already readily available and affordable but their global diffusion and uptake remains a challenge. Innovation and technology are crucial to achieving ambitious climate change mitigation and adaptation targets. However, research and development often do not receive appropriate public support. Developing countries can leapfrog high-carbon industrialisation phases by adopting, deploying and improving existing innovations and technologies. For this, it is essential to minimise financial, administrative and political barriers.

Water

The availability of freshwater resources in sufficient quantity and quality is essential for the preservation of human health and sound ecosystems. The use of water resources is also vital, however, for economic development: whether for agriculture, industrial production or for electricity generation. The world's freshwater resources are distributed very unevenly in terms of geography and seasons. In addition, water shortage is becoming more prevalent in several regions due to population growth, economic development, urbanisation and increasing environmental pollution. Thus, water resources can hold potential for conflicts between parties who have different interests and needs.

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Regions

Asia

The environment in Asia is already under tremendous pressure as a result of the unsustainable use of land, forests, water and even air in many regions. Climate change will only exacerbate these challenges. Rising sea levels will likely endanger densely populated areas, changes in the monsoon patterns can strongly impact agriculture, melting glaciers will increase long-term water scarcity, and extreme weather events such as heavy rainfall and cyclones can pose further hazards.

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Central America & Caribbean

Natural disasters and water scarcity are key challenges for most of Central America and the Caribbean. These challenges will become even more pronounced as the climate changes. Weak resource and disaster risk management and land disputes pose additional security challenges for large parts of the region. Several countries of Central America and the Caribbean have limited adaptive capacities as they face political instability caused by high social inequality, crime, corruption, and intra-state conflicts.

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Europe

As one of the most developed and most densely populated regions in the world, Europe makes heavy use of its resources, resulting in difficult trade-offs and negative consequences for the environment and ecosystems. Land is used for settlements, agriculture and dense infrastructure, creating problems of soil degradation. Water resources are stressed due to unsustainable agricultural practices. Despite nature protection policies, Europe continues to lose biodiversity at an alarming pace. Some of these trends are exacerbated by climate change, which is expected, for instance, to lead to shifts in water availability.

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Global Issues

Resource scarcities, environmental pollution and climate change are not limited by national borders, but often have a transboundary or even global impact. These issues interact with political stability, governance structures and economic performance, and can trigger or worsen disputes and violent conflicts. Exacerbating some of these trends, climate change is likely to lead to the degradation of freshwater resources, declines in food production, increases in storm and flood disasters and environmentally induced migration. All these developments pose potential for conflict.

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Middle East & North Africa

The geopolitical position of the Middle East and North Africa (MENA), its fossil fuel resources, high population growth and the political changes spurred by the Arab Spring all make the region one of the most dynamic in the world. Nevertheless, it is also one of the most arid and environmentally stressed. Dwindling water resources, limited arable and grazing land, high pollution from household and industrial waste, remnants of conflicts and increasing desertification are key environmental challenges.

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North America

Climate change has various impacts on the three North American countries of Canada, Mexico and the US. Canada and the US have well-developed adaptive capacities and foster the strengthening of capacities in other regions as well. With high per capita emissions, these two countries also bear a greater responsibility for a changing climate. Mexico has a sound national strategy for climate change adaptation, yet fewer capacities than Canada and the US. The poorer and rural populations of Mexico are especially vulnerable to climate change, due to an increased sensitivity and a lower adaptive capacity.

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Oceania & Pacific

In Oceania, population growth and economic development trends put a strain on oceanic and island ecosystems. Freshwater scarcity, overexploitation of fisheries, loss of land biodiversity, forests and trees, invasive species, soil degradation, increasing levels of settlement, poor management of solid and hazardous waste and disproportionate use of coastal areas are some of the problems. Climate change exacerbates most of these trends, while also raising questions about the future sovereignty of some island states.

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South America

South America has diverse and unique ecosystems and is very rich in biodiversity. Weak natural resource management, land disputes and extreme weather events bring about significant challenges for the region. While South America accounts for relatively few CO2 emissions, the changing climate will alter its ecosystems and greater climate variability will lead to more hurricanes, landslides, and droughts.

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Sub-Saharan Africa

In many African states, environmental security issues rank high on the political agenda. Throughout the continent, countries suffer from water scarcity, food insecurity and energy poverty. These chronic and worsening resource scarcities have severe livelihood implications and are exacerbated by political conflicts over access to and control over these resources. Climate change may seriously threaten political and economic stability in Africa. It may also put a severe strain on the capacities of states and societies to co-ordinate activities, to communicate and to organize.

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